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The 47 percent isn't what it seems

FILE - In this Aug. 29, 2012, Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks in Indianapolis. In Florida, everyone from seniors to young people expressed strong feelings about Medicare _ and the debate over its future. It's playing out in the presidential campaign as well as House and Senate races that will help determine the balance of power on Capitol Hill. The views were expressed in series of recent interviews with voters in Florida. And the responses were as varied as the solutions politicians have offered through years for this budget-busting entitlement program. (AP Photo/Michael Conroy, File)

Of all the statistics bandied about during this agonizingly slow economic recovery, it’s the most deceptive.

That statistic: the 47 percent who pay no federal income taxes.

That 47 percent figure was described this way by Howard Gleckman of the Tax Policy Center: “Rarely has a bit of data been so misunderstood and so misused.”

Even conservative sources like the National Review agree that this statistic doesn’t deserve the condemnation. When it’s quoted, the clear implication follows: Who are these slackers? Here’s who they are:

Seniors, students, the poor- Senior citizens with low incomes who aren’t taxed on their benefits or who receive additional exemptions for their federal income taxes.

- The working poor who receive credits as incentives to work and stay off welfare.

- Families who receive tax credits for their children or credits for education.

Even if you stripped out these additional tax breaks leaving only the standard deduction and exemptions, more than 20 percent of adults still would not be paying federal income taxes because they don’t make enough income to qualify.

The best breakdown of this issue came from the nonpartisan Tax Policy Center, and one of the best interpretations of the data can be found in the conservative National Review last November by Senior Editor Ramesh Ponnuru titled “The Freeloader Myth.”

Are we about to become a nation of takers? “These fears are overblown,” Ponnuru wrote.

He sees no connection between the taxes that are being paid and welfare programs. For instance, the Great Society was enacted when a larger proportion of Americans paid income taxes.

Also, the 10 states with the highest proportion of nonpayers are largely Republican states. For instance, Florida with its high senior citizen population has become dominated by Republicans. Many of these senior citizens are not paying income taxes.

Also many of these additional credits were enacted with bipartisan support, such as the child credit, which is viewed as family friendly.

The federal income tax, by the way, is one of the few progressive taxes left. People are taxed based on their incomes.

Other taxesThe sort of taxes that most everybody pays — sales taxes and payroll taxes — hit the poor the hardest.

About 8 in 10 people pay more in payroll taxes (Social Security and Medicare) than in federal income taxes.

As for the wealthy, their incomes often are understated because they obtain a larger share of their income from capital gains and dividends that are not subject to the Social Security tax. In addition, Social Security taxes are capped at $110,000 for the wealthy.

If payroll taxes are counted, the proportion of non-paying households drops to about 18 percent.

The recession is part of the problem. More household incomes are dropping families into the non-paying group. Once a real recovery takes hold, the proportion of nonpayers should drop.

Finally, it’s not only households that may pay no income tax. Companies may not pay any corporate income taxes during tough years.

For every year from 1998 to 2005, about 55 percent of large corporations paid no corporate income tax, reported the General Accounting Office.

The same principle applies here. The solution to all of this is having a thriving economy that produces jobs.

Revenues will increase in a thriving economy.

That leaves this principle: Shouldn’t every American adult and every company pay something in federal income tax if only as a symbol? That answer is yes, especially as the nation tries to move toward a balanced federal budget

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I’m writing this to Shad Khan — who came to the United States as an immigrant and has enjoyed success in this great nation — and the athletes he employs on that pathetic team he owns called the Jacksonville Jaguars: